British Banks Got A Threat from Eurozone
Ongoing financial problems in the euro zone presents a threat to British banks, the Bank of England warned. In the middle of its annual Financial Stability Report that the latest Bank of England calls for new tests on the strength of European lenders. The bank also wanted a comprehensive solution to the financial situation affecting the euro zone.
They say that the “overheating” in emerging markets, like China and India, in the end could hit British lender. The comments came after EU leaders agreed to create a permanent mechanism to ensure that each member country of the size of public deficits threaten the euro zone. Creating mechanisms of eurozone will require changes to the EU Lisbon Treaty, but now he says the order has been approved, said the diplomats.
Bank of England concerned about the continuing situation of debt in the eurozone because UK banks have substantial investments in a number of the country and especially in their banks. Meanwhile, British government support for banks in the country has reduced half since the financial crisis to 512 billion pounds, said the National Audit Office (KAN). KAN said that the total injection guarantees, loans, and equity of the tax payer peaked at 955 billion pounds.
However, the government body warned that the Treasury Department likely will still be paying for help for banks for many years to come. Audit office said that the most likely scenario is there will be no overall loss in the main guarantee of the latest annual report on financial stability of banks.